Australia Increases Wheat-Harvest Estimate on Western Supply

Australia, the world’s fourth-biggest wheat exporter, increased its production estimate on larger-than-predicted crops in the country’s west and south.

Nationwide output totaled 23.6 million metric tons in 2014-2015 from 23.2 million tons forecast in December and 26.9 million tons a year earlier, the Australian Bureau of Agricultural & Resource Economics & Sciences said in a report. Farmers will start planting the next crop in about April.

Wheat in Chicago entered a bear market last month as global supply surged. World grain production in the season that began July 1 will be the biggest ever, the United Nations’ Food & Agriculture Organization said Feb. 5. The agency’s measure of food prices fell in January to the lowest level since 2010.

“In Western Australia, the crops have done better there than what was expected a couple of months ago,” said Peter Collins, manager for agricultural commodities at the Canberra-based bureau. In Victoria, “when they harvested, they got a lot better yield off the crop than what they’d thought,” he said by phone on Tuesday.

Western Australia’s harvest, the country’s biggest, totaled 8.9 million tons in 2014-2015 from 8.4 million tons seen in December, Abares said, while raising Victoria’s production 4.8 percent to 2.7 million tons. Output in New South Wales, the second-largest producer, was lowered to 6.3 million tons from 6.6 million tons predicted in December, it said.

Lower Prices

Wheat for March delivery lost 0.1 percent to $5.295 a bushel on the Chicago Board of Trade at 9:03 a.m. in Singapore. Futures tumbled 15 percent in January, the biggest monthly loss since September, on prospects for increased global supplies.

The U.S. government will probably increase its forecast for global wheat inventories in a report Tuesday, analysts surveyed by Bloomberg News said. Reserves may total 196.22 million tons in 2014-2015 from 196 million tons forecast last month, the survey of 17 analysts and trading firms showed.

Australia’s barley production reached 7.95 million tons in 2014-2015, compared with 7.4 million forecast in December. Canola output totaled 3.4 million tons from 3.3 million tons estimated in December.

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